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Canada to Review Arctic Drilling After U.S. Spill

May 12 (Bloomberg) -- Canadian national and provincial energy regulators will review the safety requirements for offshore drilling projects in a bid to prevent an oil spill similar to the one in the Gulf of Mexico.

The Calgary-based National Energy Board will review procedures for Arctic drilling, while Canada’s easternmost province of Newfoundland said today it appointed Mark Turner, former chief operating officer of North Atlantic Pipeline Partners and Newfoundland LNG Ltd., to probe its ability to prevent and respond to a spill.

While Prime Minister Stephen Harper has said Canada’s rules are safe, the opposition Liberal Party said yesterday it wants to conduct a review of offshore drilling and that a moratorium could be necessary if current rules aren’t stringent enough.

“We need to learn from what happened in the Gulf,” Gaetan Caron, the regulator’s chair, said in a statement released yesterday. “The information taken from this unfortunate situation will enhance our safety and environmental oversight.”

The National Energy Board will announce the details of the review in the “near future,” according to the statement. It takes the place of a separate review the Board had begun into the need for Arctic operators to be able to drill relief wells during the same season. The watchdog said there is currently no offshore drilling in the Arctic and it hasn’t received any applications for such a project.

“At this point, we are satisfied with the level of environmental protection,” Newfoundland Natural Resources Minister Kathy Dunderdale said in a separate statement today. “An independent review will help us ensure industry is doing everything it can to prevent and respond to any incident in the offshore.”

The Hibernia oil project is located off Newfoundland and Chevron Corp. is conducting preliminary work for a similar project that would be the deepest ever in Canada. Oil production in eastern Canada accounts for about a tenth of the country’s total production, according to National Energy Board data.

To contact the reporter on this story: Alexandre Deslongchamps in Ottawa at adeslongcham@bloomberg.net.

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net; David Scanlan at dscanlan@bloomberg.net.

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